I’m Buying a House With My Partner. How Do I Protect Myself?
Traditionally, American couples got married, lived together, and when they had enough money, they bought a house. However, the country is constantly changing. Now fewer couples are getting married, but people still want to buy a home. If you and your partner plan to purchase one without getting married and want legal protection if the relationship ends, a cohabitation agreement is worth considering. We have helped many couples in the Greater Philadelphia area put together cohabitation agreements.
Fewer Marriages, More Demand for Houses
Marriage rates have generally declined from 1982 to 2009, according to the federal Centers for Disease Control and Prevention (CDC). They stabilized from 2009 to 2017 but dropped again during the COVID-19 pandemic.
Meanwhile, people are eager to buy houses. The inventory of houses for sale can’t keep up with demand and prices are moving skyward. The median house price in Bucks County in February 2018 was $277,250. Four years later it’s up to $400,000, according to Redfin. Currently, the average time a Bucks County house is on the market is three weeks.
State Statutes Cover Married Homeowners. Contracts Can Cover Homeowners Who are Not Married
Under Pennsylvania statutory law, if you’re married, buy a house, then divorce, your marital assets and debts are divided. If you’re not married, you can use contract law, through a cohabitation agreement, to do the same whether you’re of the same or opposite sexes. Without marriage, there aren’t statutes you can rely upon to fairly resolve shared housing issues if the relationship ends.
Such an agreement can include many things, but topics that could be covered include:
- Assets like real estate, bank accounts, and vehicles
- Debts such as the mortgage, car loans, student loans, and credit card debts
- How housing-related bills and obligations will be paid
- What will happen if one or both of you become unemployed or too disabled to work
- Whether each party will obtain life insurance with the other party as a beneficiary so their share of the mortgage can be paid if they die unexpectedly
- How the home is titled
- How the home and property (including household goods and furnishings) will be split if the relationship ends
- What happens if a party breaches the agreement
What’s in a cohabitation agreement is up to the parties, but an experienced attorney can suggest language that’s needed to protect your interests.
An Oral Agreement May be Valid, But Proving It May Be Difficult
If the two of you make a verbal agreement on splitting mortgage payments, taxes, insurance, and maintenance, it may or may not be legally binding. More importantly, it’s generally much more difficult to prove one was made and, if so, its terms. You may claim the two of you agreed. Your partner may deny it. Without further proof, your claim will go nowhere.
A written agreement is literally on paper, in black and white, signed by both parties, with the terms spelled out. One party could claim it’s invalid (because you engaged in fraud to induce them to agree to it or because performing the contract is impossible), but when both parties are represented by attorneys and the agreement is negotiated in good faith, establishing that should be very difficult.
A Cohabitation Agreement May Only Be the Beginning
If you share not only a house but have children together too, you should also have child custody and support agreements even if you’re on “good terms” on these issues. Situations change, so it’s best to work these issues out now in case the relationship ends in the future and the parties become angry and emotional.
Get the Help You Need From an Attorney You Can Trust
If you have questions about a cohabitation agreement or want help putting one together, use our online calendar to schedule a free consultation or call us at (215) 752-6200.